Standing Committee B

[Mr. Roger Gale in the Chair]

Gambling Bill

Roger Gale: Good morning, ladies and gentleman. I apologise for the fact that we are, yet again, in Room 12. A state visit is the reason and we must be able to accommodate that.
 Will all Committee members and anyone else who enters or leaves the Room be kind enough to be aware that the doors are not self-closing and that they slam, which annoys members of the Committee and its Chairman? The Committee would not wish to annoy its Chairman.

Mark Prisk: On a point of order, Mr. Gale. It is fair to say that the Committee made good progress last week and I am sure that all hon. Members welcomed that. However, I wish to register my concern and to seek your guidance, because on Friday the Government tabled a number of significant changes to the Bill, including new clauses 16, 17, 18 and, of particular concern, new schedule 2, which extends to six pages. There is some concern, as you will understand, over whether we are to achieve our aim of improving the quality of the legislation through good scrutiny, because there is a danger that we shall have very little time to consider the proposed changes. Pertinent to that is the fact that the essence of a Committee such as this is to understand the concerns of those outside whom the legislation will affect directly. They will not have had time to consider the effects of the changes. I seek your guidance, Mr. Gale, on whether it is appropriate to consider the new provisions at this stage.

Roger Gale: The Chairman always wishes amendments to be tabled in a timely fashion to give Committee members and those outside who have a deep interest in the matter time to consider the nature of the proposals, their content and their possible effect, as the hon. Gentleman said. At the start of our proceedings in Committee, I made it clear that I would not accept manuscript amendments. That is all. So long as amendments tabled by any party are tabled in orderly fashion and printed on the amendment paper, they are available for consideration on reaching the appropriate part of the Bill.
 Having said that, I have no means of knowing how much progress we shall make this morning. The Committee will rise at 11.25, as is our practice, and that will give ample opportunity for the usual channels to discuss these matters.

Richard Caborn: Further to that point of order, Mr. Gale. I apologise to the Committee. We have not had a lot of
 time in which to get these amendments and new clauses out. We have done so as quickly as possible and we have consulted the British Beer and Pub Association. Nevertheless, I accept the comments that have been made. The usual channels may agree that it will be convenient to stop a little short of the time allocated to allow for reflection and further debate. I hope that the usual channels will be able to deliver that.

Malcolm Moss: Further to that point of order, Mr. Gale. I want to put on the record our gratitude to the Minister for his comments. We made excellent progress last week and we are ahead of the game. We are awaiting what will probably be a considerable number of Government amendments, which we hope to discuss in Committee rather than on Report. We will work with the Government to ensure that the Bill leaves Committee by 16 December, which gives us a little more time to consider the amendments with a little more scrutiny.

Richard Page: Further to that point of order, Mr. Gale. I find the situation completely and utterly unacceptable. The Government have had years to prepare the Bill. We on the Opposition Benches do not have the resources to examine the new clauses within a time scale that allows us to consult, whereas the Government have had plenty of time to do that. Introducing the amendments at this stage is disgraceful and a mark of the way in which this Government operate. I wish my objection to be registered firmly and strongly.

Roger Gale: The hon. Gentleman has made his point. The Chairman always wishes amendments to be tabled in a timely fashion but, as long as those amendments tabled are in order, as these are, they are available for consideration by the Committee. The hon. Gentleman will have heard the Minister's comments and I hope and expect that the usual channels will work their magic during the break between the morning and afternoon sittings.Clause 219 Gaming machine

Clause 219 - Gaming machine

Question proposed, That the clause stand part of the Bill.

Mark Prisk: This is my first speech on the substance of the Bill and I take the opportunity to welcome you to the Chair, Mr. Gale. I will seek your guidance as we continue with our deliberations.
 Clause 219, which begins part 10 of the Bill, raises a number of important considerations that I want the Minister to respond to. It is clear that the definition in subsection (1) is significantly different and broader than that in the Gaming Act 1968 which it will replace. I understand why the Government have made that step. Since 1968 there have been a significant number of changes in technology and in the variety of machines on which gaming can be engaged in. One 
 thinks immediately of computers, but a number of other forms of technology have also come forth since 1968. They include interactive television, with which even now many of us are grappling. I struggle to programme my video recorder, let alone cope with the challenges of interactive television. However, I am told by those from younger generations that such things are indeed the future. 
 I want to draw to the Committee's attention another concern to which I hope the Minister will be able to respond. When reading the excellent explanatory notes that accompany the Bill, I saw that paragraph 485 on page 84 says: 
 ''The new definition accommodates developments in technology which have taken place since the 1968 Act.'' 
I have referred to that. The paragraph goes on: 
 ''It also covers a wide range of gambling activities which can take place on a machine, and includes betting on virtual events.'' 
Therefore, as I understand it, the scope of the definition is related not simply to the technology but to the activity on that technology. It would be helpful if the Minister clarified the scope of those activities, not just the scope of the machines, which are more easily defined and are set out in subsection (2). 
 My second consideration and concern is the manner in which the definition has been presented. In subsection (1) we are provided with what it is fair to describe as an all-embracing definition. The subsection says: 
''a 'gaming machine' means a machine which is designed or adapted for use by individuals to gamble (whether or not it can be used for other purposes).'' 
There is then a series of exclusions from that wide-ranging definition. For example, the definition excludes a ''domestic'' or, for that matter, a ''dual-use computer''—by which I assume is meant a computer used for domestic and business purposes, although it would be helpful if the Minister confirmed that. It also excludes telephones and other such items, which I shall consider in a moment. 
 My concern is that by establishing an all-embracing definition and then trying to anticipate exceptions, there is a danger of gaps. There is also a danger of uncertainty in the areas between those elements that have been excluded. I would be appreciative if the Minister explained the reason for defining machines in the way in which the Government have chosen. That is important because, just as we recognise that technology has changed since 1968, this Act will have to respond to future changes. Therefore, there is a danger of uncertainty about what is within the scope of the Bill. I hope that the Minister will enlighten us on that point, technical though it may be. 
 I turn to some more detailed points that concern me and, I suspect, will concern those affected by the Bill. I draw the Committee's attention to subsection (2)(b), which refers to 
''a telephone or other machine for facilitating communication is not a gaming machine by reason only of the fact that it may be used to participate in remote gambling''.
I hope that the Minister will be able to clarify this point, but I assume that the phrase 
''other machine for facilitating communication'' 
relates to interactive television. There may be other technologies, but that is not made clear. I return to my previous point: it is a rather woolly description. Will the Minister set out exactly what the Government understand by 
''other machine for facilitating communication'' 
in that context? That would be very helpful for those following our deliberations. 
 I turn to subsection (3). I confess that the point is slightly pedantic, and I fully own up to that trait. I am unclear whether all three conditions are required to meet the definition, or whether a combination of each of the individual sub-conditions are required. I shall explain what I mean by that in English. I noticed that where paragraph (b) says ''and'', it implies that both (b) and (c) are required to meet the definition. Do I take it that the end of paragraph (a) should also include the word ''and'', in order to mean that all three are required for the definition to be met? That is quite important because there will be a danger when people are trying to meet the conditions that they will be uncertain whether they need to meet (a), (a) with (b) and (c) or (a), (b) or (c). That is a small point—indeed, ''and'' and ''or'' are small words—but it is important in relation to people's compliance with the legislation. 
 I wonder whether the Minister would clarify the Government's intention in relation to subsection (4)(e). It states: 
'''domestic computer' and 'dual-use' computer shall have the meanings assigned by the Secretary of State in regulations.'' 
That is a pretty wide power. Given the way in which technology changes, the provision has a large scope—I shall provide an example. As I understand it, television technology such as Sky+ uses a hard drive to store received television signals. 
 Most of us would understand that the technology of a personal computer and such hard-drive storage equipment, which allows higher services such as interactivity, are one and the same technology. I am unclear whether there is a danger that computers that happen to have a screen and are understood to be a conventional PC may end up being regulated differently to a box with the same hard drive that happens to sit under a television. Indeed, as I understand it—and I am no expert in this field—the computer screen and the television screen may become one and the same. Far be it from me to anticipate how people will endeavour to use their computers and televisions in the future, but there is a danger that the two may be regulated differently. 
 I would be grateful if the Minister explained the Government's intention with regard to the Secretary of State's making regulations.

Don Foster: In detail.

Mark Prisk: I am grateful to the hon. Gentleman for his support for this narrow, but very significant point.
 Alluding back to my concern about wide and woolly definitions, I say to the Committee that subsection (5)(d) states that the regulations made under subsection (4)(e), in particular, make provision by reference to 
''the software installed on a computer''. 
I am assuming, although one should never do so with legislation, that that is gaming software, because clearly if one took the meaning at face value, the danger would be that, according to the Bill, the Secretary of State could regulate any form of software installed on a computer. I doubt that that is the Government's meaning, intent or purpose, but the Bill says what it says, and I would be grateful if the Minister could confirm whether it is meant to refer only to gaming software. I must inevitably ask him to define what he means by gaming software. 
 With those thoughts in mind, I look forward to what the Minister has to say. I hope that we will be able to improve the Bill through these deliberations. I am grateful to you, Mr. Gale, for allowing me to contribute to the debate.

Richard Caborn: The hon. Gentleman shows why we need new legislation: because of the problems of new technology. If the Second Reading debate had concentrated on these matters, which should be of real concern to the public because of the way people can access gambling in this new electronic era, the need for new legislation would have been even clearer. We are talking about the difficulties that we face in ensuring that we future-proof the Bill.
 Before I go into the detail, I want to make it clear that we are talking about having a powerful new gambling commission. We will include quite a lot of material in further regulation to clarify a number of points, but I will try to go through each point that the hon. Gentleman has raised. As I say, the definition of a gaming machine is completely new and has been broadly drawn to capture all machines used for gambling. It therefore needs to be future-proofed. This is a major and much-needed reform. 
 The definition covers virtual betting and gaming by machine, as well as virtual lotteries. That means that machines currently known as fixed-odds betting machines are covered by the new definition. The hon. Gentleman may know that that has been a bone of contention for some time, but at least now we will be able to clarify that in the Bill. Machines currently being offered in reliance on section 21 of the Gaming Act 1968 and section 16 of the Lotteries and Amusements Act 1976 are also covered. 
 There is no longer a requirement that there be a slot for inserting money into the machine, nor that an element of chance must be generated in the machine. Both those elements of the present definition have lead 
 to avoidance of gaming machine regulation, and we now wish to ensure that all machines offered for gambling are caught properly as gaming machines. 
 There are a number of specific exemptions from the definition to remove devices that should not be regulated as gaming machines, even though gambling can take place on them. That does not mean that such equipment will always be outside the scope of the Bill, but simply that it should not be regulated as a gaming machine under part 10; for example, telephones or domestic personal computers are everyday devices that can be used for many activities in life other than accessing internet gambling, so that equipment is carved out from the definition. We will make regulations defining both domestic and dual-use computers. We will ensure, through regulation, that operators do not abuse those exemptions.

Malcolm Moss: The Minister raised the issue of domestic and dual-use computers. Subsection (4)(e) states that the Secretary of State may define them in regulations. Subsection (5) states:
 ''Regulations under subsection (4)(e) may, in particular, make provision by reference to''. 
There follows a whole host of things, which were mentioned by my hon. Friend the Member for Hertford and Stortford (Mr. Prisk). Given the wide range of those provisions, including paragraph (e), which refers to ''any other matter'', does that not convey the fact that the Government have not got a clue how they are going to define domestic and dual-use computers? It might be helpful if, while the Minister is on the subject, he could give us some indication of the Government's thinking.

Richard Caborn: That is the problem that any Government would face, trying to look ahead five years and project how the electronic age will affect any sector or any industry, including the one under discussion. Do we return to the prescriptive role of the 1968 Act, where proposals for everything from increasing the number of slot machines to increasing the amount of prize money must come back to the Floor of the House? Or do we create a new framework, as we are trying to do through a new regulatory authority, which takes the successful provisions of the 1968 Act and puts them into a body that can respond to the ever-moving world in which we live, make sensible decisions and still be accountable to Parliament?
 We are trying to create a framework whereby the gambling commission and the Secretary of State can respond to an ever-changing world. If we do not, either the industry will stop growing and developing or a lot of parliamentary time will be absorbed unnecessarily. One tries to project sensibly the powers, and the parameters of those powers, which the gambling commission or the Secretary of State will need, and that is what the wording of the provision is about.

Ann McKechin: Will the Minister clarify something for the sake of the Committee? I understand that the virtual roulette machines, which are commonly found in betting shops, are one of the most profitable parts of a
 bookmaker's business. Someone quoted to me that about one third of William Hill's profits relates directly to those machines. I welcome the Government's intention to regulate them, because they are from where local bookmakers obtain their real profits. It would be helpful if the Minister could provide us with an idea of how large that sector is.

Richard Caborn: I do not know how large the sector is; all I know is that because of the question, to which I have just referred, about the definition of a fixed-odds betting terminal and what type of machine it is, we had to come to a sensible arrangement. There was a dispute about the definition, and sensibly the Government and the industry came together rather than cause a massive explosion of wall-to-wall FOBTs in betting shops. We did not allow that to happen. We sat down with representatives from the industry and sensibly agreed a formula.
 There are more than 20,000 machines; that is what it says on the note before me. We needed new legislation: we could not control FOBTs, and there was an argument about what the machines are and whether one could install a number of them in betting shops. That would have lead to long arguments in court, but we took a sensible approach and came to an agreement with the industry. We said then that we would tackle the matter in the Bill, and that is what this and many other clauses are about.

Richard Page: Will the Minister address closely the points made by my hon. Friends the Members for North-East Cambridgeshire (Mr. Moss) and for Hertford and Stortford? Subsection (4)(e) enables the Secretary of State through regulation to make provision by reference to a machine's location—whether it is in a house—and its purpose. That provision will give the Secretary of State immense power over our individual lives. Although the Minister says that the power will be made by regulation so the proposal will come back to the House, we know that statutory instruments just go through the House and that there is no ability to debate and amend them. I would be a lot happier if, when the Minister makes further comment and says that ''the Secretary of State may'', he were to include the phrase, ''subject to advice or agreement with the gambling commission.''

Richard Caborn: If I may, I will go through each subsection. That might be more sensible. If the provisions need to be strengthened, we will consider that in the spirit in which I have just explained the clause and in light of what we hope to achieve.
 Other exemptions set out in subsection (2) are intended to allow operators to automate some of their gambling products without opening up loopholes allowing them to offer machine gambling on devices to evade the gaming machine entitlements. For example, lottery ticket vending machines and automated terminals for betting on real events will not become gaming machines under part 10 of the Bill, nor will equipment used by croupiers in casinos for gaming. That includes terminals linked to live table games, which simply offer electronic methods of taking part in a real game of chance. However, wholly automated 
 gaming equipment, which does not need a person to operate it on behalf of a casino, will be caught in the definition of a gaming machine. 
 I believe that the clause strikes the right balance between preventing evasion of the gambling regime and allowing certain equipment to fall outside the regime. 
 Let me go through each of the areas that have been mentioned.

Mark Prisk: The Minister is steadily working through the arguments, and rightly so. One of my concerns, to which I would like his response, is that, inevitably, technology will adjust and the Government will have to play catch-up. One sees that in other areas of Government; for example, in the taxation system. My concern is that that adds to the sense of uncertainty.
 I am aware that the Government need to be able to provide themselves with a degree of flexibility, but the point raised by my hon. Friend the Member for South-West Hertfordshire (Mr. Page) is right: we are giving the Government considerable powers. Does the Minister understand our concern about that? Will he commit to stating for the record the Government's willingness to provide some means of genuine accountability in the future?

Richard Caborn: On that specific point, the commission already has a duty to give advice to the Secretary of State. That is laid down in clause 25, so there is no need to add that power in part 10. The commission has to give advice to the Secretary of State. The Secretary of State is accountable to Parliament, so there is that link. The Government account to Parliament; we did so yesterday in Question Time and would do if brought before the House on other issues. There are ways of scrutinising the Executive, including a requirement that the commission report to the Executive—to the Secretary of State—as laid down in clause 25. Therefore, the commission will be accountable to Parliament. In making regulations, the commission must have due regard to many of the provisions detailing its powers. I therefore believe that reporting works.
 I return to a point made earlier—the problem that we had in deciding the scope of the definition, which is probably close to being the core of the Bill. The definition is deliberately drawn wide. The operators will have to get out of that definition. At the moment, the problem is that the definition is too tight, so there is the potential for abuse. The clause is about having a broad definition; it is also about accountability and it aims to bring clarity to the issue. We will do that by regulation.

Richard Page: I go along with everything that the Minister says, but does he not accept that, particularly when it comes to subsection (5), the Secretary of State can take decisions and actions without advice from the gambling commission? There is an independence about the position, but we want it linked to the commission's advice and direction. We do not want the Secretary of State to go off and do something to achieve some other end.

Richard Caborn: Subsection (5) says:
 ''Regulations under subsection (4)(e) may, in particular, make provision by reference to''. 
So, the Secretary of State will have to refer to subsection (4)(e), which refers to domestic and dual-use computers. We are talking about a specific area. 
 If we want to future-proof the clause, we have to include such wording. If we did not want to future-proof it, we would not include that wording. So the balance of the argument of the pre-legislative scrutiny Committee, of the Budd report and of ''A Safe Bet for Success'' was an attempt to get consensus on how much power we give the Secretary of State and the gambling commission to future-proof regulations and to protect the punter. If one wants to continue down the path of narrowing the definition, there will be consequences.

Richard Page: We are not trying to disagree with that. We are just trying to make the point that we would like any decision-making process to be coterminous with advice from the gambling commission. A Secretary of State—trustworthy though they all are—should not go roaring ahead in their own direction. I would like the Minister's assurance on that.

Richard Caborn: The Secretary of State will always look to the gambling commission for advice on gaming machines regulations and there is no need to provide for specific consultation. The commission will be the regulator; it is the expert and it is the body that will advise Government. It will not just advise the Secretary of State but the industry as well. The hon. Gentleman is being a little pedantic and theoretical, which is out of character because he usually takes a more broad-brush and common-sense approach. It is a common-sense approach that one needs, rather than acting like one is in the Oxford debating society. However, that may be because it is Tuesday morning.
 I shall go through some of the points raised. On the question of betting on virtual events, the scope of clause 219 is betting, gaming and lotteries. That includes fixed-odds betting terminals, although subsection (2) carves out certain types of activities, as the hon. Gentleman acknowledges. ''Dual use'' means the sort of computers used in business, whether in the office or in legitimate internet cafes. The definition in subsection 2(b) covers interactive television. That has been confirmed with parliamentary counsel. It covers all equipment for communication and we intended the definition to be broad. 
 The requirements in subsection (3) are cumulative. We do not believe that an additional ''and'' is necessary, but we will confirm that with parliamentary counsel. The powers in subsection 4(e) need to cope with a number of complex scenarios and can cope with digital television.

Mark Prisk: May I clarify one point? Does the Minister mean that the word ''and'' should be inserted at the end of subsection (3)(a)? In other words, are the three conditions required together? The way that it is written suggests that that is not the case.

Richard Caborn: No, we do not think that ''and'' is needed, as I said.
 With regard to subsection (5)(d), we must be able to take account of computers in public places with dedicated gambling software. That is to make sure that we catch the right sort of computers.

Mark Prisk: I must confess that I was just double checking and I may have missed the point. Perhaps the Minister would guide me: where in the Bill or the explanatory notes is the term ''dual-use computer''?

Richard Caborn: Subsection (2)(a).

Mark Prisk: What does it mean?

Richard Caborn: It means that the machine is in a public place. The regulations need to cover such matters as whether the machine is in a public place, whether there are links on the computer to gaming sites and whether there are posters advertising gambling. Therefore, the powers must be wide, which is why we have drafted them in such a way.

Mark Prisk: I am grateful to the Minister for responding to several points, but that last sentence muddied the water. I do not think that he clarified the apparent danger of the distinctive regulation of computers and of interactive television. It being early on Tuesday morning, I may have misheard the last point about posters advertising gaming. I did not quite understand what that meant or its context.

Richard Caborn: Much of that will be covered in regulations; it will not be in the Bill. We are setting out the scope. There will be many such areas. The means will be defined in regulation. I hear what the hon. Gentleman says, but the definition of dual use is computer use for more than just gambling. When we bring out regulations, a number of those areas will be clarified and I hope that we will be able to communicate that to people so that we can remove some of the uncertainty that he and the industry are concerned about. We believe that we have got right the scope of the Bill and what has been included in it. We believe that the accountability that has been laid out is right. However, we realise that further information is needed. That will be dealt with in regulations, which should remove that uncertainty and provide the clearer definitions that the hon. Gentleman has been asking for.

Mark Prisk: I do not want to stretch your patience too far, Mr. Gale, but I am still unclear about that last element. I just wanted the Minister to confirm what he said and what it meant. Presumably it is something to do with an indication that the machine has a particular function that is regulated—I am working off the cuff. Will he clarify what he meant by his concluding point in his last but one contribution? I do not understand where that point came in. I am clearer now on the question of dual use, in the sense that we are talking not about domestic versus business, but about whether the use is domestic or public. That has been clarified, but I really did not understand the point that he made two speeches ago, when he wound up by saying
 something about the presence of posters advertising the machines. Will he clarify that now or perhaps in due course?

Richard Caborn: If I may, I will write to the hon. Gentleman and to other members of the Committee about advertising and those definitions. I hope that we have demonstrated that we are trying to take those wider powers and define them in regulations. There will be accountability to the House through the structures that I have outlined. I will write to him on the points that he wants further clarification on.

Nick Hawkins: I have been listening to this debate with interest. Will the Minister undertake to write to all members of the Committee and not just to my hon. Friend the Member for Hertford and Stortford, because we are all interested?

Richard Caborn: Yes.
 Question put and agreed to. 
 Clause 219 ordered to stand part of the Bill.

Clause 220 - Gaming machines: Categories A to D

Malcolm Moss: I beg to move amendment No. 276, in clause 220, page 101, line 45, after 'sub-categories', insert
'including a sub-category dealing with linked machines (as defined in section 228) to be known as Category B*'.
 This clause is one of the most important in the Bill. There has already been some discussion—I think that it was under clause 163—relating to the categorisation of the various gaming machines, as that was the first area of the Bill where those issues were raised. The amendment relates to clause 220(2)(a), which states: 
''divide Category B into sub-categories''. 
I do not want to rehearse the arguments that I will be deploying later in the context of clause 228, which deals with linked machines. This is a consequential amendment that introduces in an earlier place in the Bill the concept that linked machines perhaps ought to be considered differently, whether they are category Bs or any other category, although this amendment is concerned specifically with category B. That would ensure that operators could not move the categories up and down if they were to link different categories either within the same unit or elsewhere. 
 This consequential amendment introduces the concept of a sub-category if machines, particularly category B machines, are linked in the same premises or elsewhere. It ensures that, if we are to have strict categorisation, we can prevent people from being able to link Cs with Bs, Bs with As and so on, because such practice would undermine the whole concept of categorisation in the first place.

Richard Caborn: The linking of machines does not affect maximum stakes or prizes. Category B prizes are always the same. The hon. Gentleman is right: we will discuss the matter again when we debate clause 228, and that is probably where clarification will be forthcoming.

Malcolm Moss: I am grateful to the Minister, and no doubt we will have a fuller discussion about this matter when we discuss clause 228. I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Question proposed, That the clause stand part of the Bill.

Malcolm Moss: As I said a moment ago, this is one of the most important clauses in the Bill. In the interpretation of many in the industry, the Government's definition of the various machines leads to an unlevel playing field, unfairness and inconsistency. It is the source of a lot of dissension, unrest and problems in the industry.

Mark Prisk: I suspect that my hon. Friend will be leading up to this point, because he is very thorough in his preparation, but I and some of my constituents are concerned about the way in which this legislation falls particularly on smaller enterprises. I wonder whether he will allude to that in his remarks.

Malcolm Moss: I shall certainly allude to that concern. I intend to go through categories A, B, C and D in that order. My hon. Friend has raised an issue about category D machines, and they will have to wait their turn on the list.

Nick Hawkins: I imagine that my hon. Friend will agree with me that one of the biggest concerns about these provisions is the way in which they will affect members of the British Amusement Catering Trades Association. He is aware that I have been working with that association on a voluntary basis more or less throughout my time in Parliament. Does he agree with me that, instead of leaving everything to regulations, it would have been much more helpful to members of BACTA, who operate some of our most popular and successful amusement arcades, if there had been a great deal more guidance in the Bill about how its provisions will operate?

Malcolm Moss: My hon. Friend makes an excellent point. That uncertainty is at the heart of the disquiet I mentioned a moment ago, about not only one category of machine but all categories. BACTA is not the only one with concerns; the British Casino Association, the Casino Operators Association and the Bingo Association and no doubt, investors from abroad, particularly the Americans, will be concerned to ensure that the number of category A machines in the Bill is not diluted or changed.
 The real problem is that either there has not been enough discussion or the Government have not listened carefully to the points put to them across the board. 
 I know that the Government's position is one of protection. They are selling the Bill on the basis of protecting the vulnerable and children, reducing the opportunities for ambient gambling and trying to have some control over the whole system. We do not demur from that approach, but it must be even-handed. I have made the point on a number of occasions that any legislation should attempt to deal even-handedly with existing operators and those who expect to get grandfather rights at any level, as well as to encourage new investment of the sort that we have been talking about concerning regional casinos. 
 The Secretary of State in her evidence to the scrutiny Committee, when asked about her intentions for fixed odd betting terminals—the issue was raised by the hon. Member for Glasgow, Maryhill (Ann McKechin) a moment ago—said that they 
''will be treated as gaming machines under the Bill and our intention has been that they should be classified as Category B machines and therefore available in adult gaming centres, bingo clubs and betting traps as well as in betting shops.'' 
She gave a clear indication that that was the Government's intention at the time. Since then, there has been a massive turnaround and FOBTs will not be allowed into the areas indicated by the Secretary of State to the scrutiny Committee. I shall come to that later, but the indication was given earlier to the industry that an even-handed approach would evolve. 
 When questioned about comparability, Lord McIntosh said in a speech recently: 
''So far as arcades were concerned, their competitive position might have continued to erode.'' 
He accepted then that the Government's more recent position, particularly in relation to adult gaming centres, is that that sector of the industry is at a disadvantage, particularly with FOBTs, and that its competitive position might have continued to erode. He acknowledged that there is a problem. BACTA certainly told him that there was a problem and that it feels that it is being penalised and discriminated against by the Government's decisions. The noble Lord then said: 
 ''Second, we will be considering the case for using the Gambling Bill to restore the comparability between machines in Adult Gaming Centres and betting shops. There are arguments on both sides, and we want to hear them.'' 
We can hear them today. We need not wait until the Bill goes to the other place; we can make the argument today for some form of comparability. 
 Any agreement that has been arrived at between the Government and the Association of British Bookmakers, as the Minister indicated recently in response to the discussion on clause 219, is welcome. A code of conduct has been devised and proper research is being done. I do not subscribe to the view that that research is biased in favour of the betting industry, because it is being financed across a broader 
 front and independent assessors are being used. A preliminary report has already landed on the Minister's desk and I hope that he will share the findings with us when he responds.

Mark Prisk: I am listening with fascination to my hon. Friend because he is highlighting one of our central concerns. Will he enlighten us on his view? From what he described, it seems that the Government's position is constantly changing. Does he think that that is deliberate, or does he believe that they are muddling through, which seems to be the case from what he has said?

Malcolm Moss: My hon. Friend has got that one right. Do we want the definition of ''muddling through'' to be in the Bill or in regulations? My hon. Friend makes a good point: there is inconsistency between what has been said, what is now happening, and what may happen. That uncertainty is causing concern in the industry.
 I return to the position on FOBTs. Research is being conducted, and it is being conducted properly. Its terms of reference were defined by the Government, not by the betting industry. It is being funded by the ABB and the Minister's Department, and it is being conducted by MORI and Europe Economics. We have no problem with any of that. 
 A code of conduct has been agreed, and in the end common sense prevailed and the Government and the industry decided that a long process of litigation through the courts was in no one's interests, so an agreement was come to. We now have four FOBTs in each bookmakers' premises. The Minister gave us a total of 20,000—I think—across the country. 
 For the bookmakers, who negotiated that position, that is a profitable enterprise. They are operating under a code of conduct, and research is being done into the effects of having that new form of gaming on their premises. However, there is a broader question. Why should only a particular section of the industry be given FOBTs? Why are they not available across the board, which is what the Secretary of State had suggested, so that bingo halls and adult gaming centres can have them? That issue needs to be addressed. 
 Lord McIntosh says that the Government have an open mind. The current agreement with the ABB has restricted numbers, which is a good thing in some ways. However, he is also saying that that took place in advance of the Bill and the discussion on it, and he is suggesting that what evolves in the future is up for grabs. The Minister may simply say, ''Well, we will leave that to the gambling commission.'' That would be a total cop-out. The Government have clear views on all sorts of things, including the definition of categories of machines. Why can they not also have a clear vision of where they want the machines to go, rather than simply saying, ''We have had a problem with FOBTs, but we have come to a deal with the ABB: the machines are in betting offices, but we have restricted the number and there is a code of conduct so that is fine''? It is not fine so far as the other players in 
 this scenario are concerned; they feel that because of that decision they now have a serious uncompetitive edge.

Don Foster: The hon. Gentleman has given a detailed and fair analysis of the problem and the current unlevel playing field. However, he said on a number of occasions that it is important for the Government to have a clear position on this issue, but I have failed to hear what his clear position is. Does he believe that FOBTs should be allowed in some of the other establishments to which he has referred?

Malcolm Moss: I am happy to address that. There may well be restrictions on the regional casinos, in which case we would have a big pyramid. Who knows, there may well be restrictions for casinos at a lower level, too, if the Government's approach is to have more influence on the development of events, which makes sense. The Government have already demonstrated that approach in their intended restrictions on category D machines, and in the agreement with the ABB—which may be superseded—to have limited numbers of FOBTs in certain locations. I have no problem with that, but why do the Government not simply come to an agreement that certain numbers of those machines can go in other places?
 The machines could be restricted to two, four or whatever number, but the Government should have good reason for limiting them. There is nothing to suggest that issues such as problem gambling are arising from the use of FOBTs. The Government have to justify their decision to allow them only in certain locations. 
 Category A machines—we have already had part of this argument—will only go into regional casinos. The original plan was—well, it was not a plan; it was a free-for-all, the idea being to let the market decide. On more than one occasion, the Secretary of State, the Minister and the Prime Minister said that there might be between 20 and 40 regional casinos. There has been a significant move on the part of the Government, or a climbdown, if one likes to call it that. The Minister saw the light and grabbed it by the scruff of the neck, and delivered on eight, although we wanted four. We cannot really grumble too much about that; it is a significant concession. 
 Instead of a possible 1,250 category A machines in each of 40 regional casinos—that is 50,000 in total, if my maths has not failed me—there is now the prospect of a total of 10,000 such machines in the limited number of eight regional casinos. The Americans tell us that they want more than that. They say that they will only just scrape by on 1,250 per casino. [Laughter.] The hon. Member for Colchester (Bob Russell) laughs, but the Americans say that in Las Vegas they have 2,000 or more such machines in a casino. They say that if we want an investment of £20 million, or whatever the figure is, in a regional casino complex, along with leisure activities, hotels, theatres, restaurants and so on, that investment will obviously need paying for.

Bob Russell: Can the hon. Gentleman say which European countries have mega-casinos of the size of those proposed in the United Kingdom or of those in Las Vegas, to which he alluded?

Malcolm Moss: I honestly do not know the answer, although the hon. Gentleman probably knew it before he asked the question. I think that there are limited numbers of casinos in the EU. My knowledge of the French industry is that the French were very prescriptive about where they locate casinos; they put them in spa resorts. I am not sure where the hon. Gentleman is leading with his question. I know that certain countries, such as France, have been very particular as to where they place casinos.

Bob Russell: I wonder whether the hon. Gentleman thinks that it would be helpful to the debate in the United Kingdom if the Government provided examples of how our European brothers and sisters have handled the issue of mega-casinos and the type of gaming machines that he mentioned, which we are told are very common in the United States. It would help the debate if we could have examples of how the issues are dealt with in the European Union.

Malcolm Moss: The Minister heard the hon. Gentleman's question, and although I do not have the answer to it, the Minister may respond to it in his own good time.

Richard Page: Would it help my hon. Friend if I said that he is absolutely right in saying that the French have been very prescriptive about where they locate their casinos? However, there is an obligation on casino operators to provide cultural support for particular areas; for example, by providing an arts theatre. I can produce actual examples if my hon. Friend requires me to do so.

Malcolm Moss: That, too, is an excellent point, but with all due respect the Government intend to achieve similar outcomes through the regeneration benefits from the permissions for the eight regional casinos. No doubt we will have greater detail on that later, when we get the criteria for selecting the eight. However, the Government's position, which we share, has always been that the permissions for regional casinos or resort casinos—or leisure destination casinos, as my hon. Friend knows the scrutiny Committee wanted to call them—should be predicated on the delivery of massive regeneration benefit, either culturally, socially or economically. Hopefully, the Government will establish tight criteria to achieve that end. The incoming investors—with all due respect to them—will also want to see that regeneration, because that is part of the reason for allowing them in as planned.
 The question of whether there are 1,250 or 2,000 category A machines is irrelevant in a way, because the big casinos would say that they know their clients and are capable of setting up sophisticated mechanisms for tackling problem gambling and counselling people who get into difficulties. The evidence from the United States and South Africa is that there is not massive 
 problem gambling as a result of access to category A machines in casinos. There is plenty such evidence in Australia, but category A machines are on every street corner there, in pubs, bars and so on, and ambient gambling is a serious problem. Given evidence from the United States, why are the Government imposing a limit of 1,250? Why not 1,000 or 1,500? There is no logical answer, because 1,250 is a number plucked out of the air and, although incoming investors could probably live with it, it is not based on any serious logic.

Mark Prisk: My hon. Friend is providing us with an incisive insight. Does he think that there is an economy of scale below which there is a danger that the investors whom the Government wish to draw in may hesitate and we may end up with something that is, in legislative terms, neither one thing nor the other? In other words, we will have something that does not achieve the goal that the Government are claiming and that does not settle and clarify existing legislation.

Roger Gale: Will the hon. Member for North-East Cambridgeshire be kind enough when he resumes to address the Chair, rather than the Committee? He will find that not only will the Chairman be able to hear him more easily, but so will the vast listening audience to whom the sitting is broadcast.

Malcolm Moss: I will, Mr. Gale, although I do not want to turn my back on Committee members, because they have such smiling faces.
 There is a threshold. Investors will be making a significant investment and they have a view on whether a deal will be profitable and worth doing, or not worth doing. They seem content with the threshold of 1,250 machines, although I think many of them would like more. They are interested in upgrading the facilities. Many have told me that they are quite happy with the requirements for floor space to be extended above 10,000 sq m. Those people are not hesitating to come forward with substantial investment, but that has to be mirrored and replicated by the return from the gaming machines. We do not have a problem with a pilot scheme for regional casinos with category A machines. However, there still seems to be a misunderstanding on the part of many of those involved. 
 I am also not sure whether the Secretary of State and the Minister are clear in their own minds exactly what the category A machines will do. At Question Time yesterday, the Minister said that only a proportion of the machines would be category A machines. That is not my understanding. Incoming investors want 1,250 category A machines. There will not be unlimited stakes and prizes on all of those, of course, because we could not afford that. A proportion at the top will pay out huge amounts, but the majority will pay out sums similar to those offered by category B machines, while still being defined as category A machines. 
 In other words, the point about category A is that the machines can be altered all the time to do what we want them to do. They can either pay out a huge amount or a smaller sum. It is that mix of machines, 
 stakes and prizes that gives the operator total flexibility and control over the end product. That is attractive to operators. So, the machines will be category A, in that the stakes and prizes will not be limited, but the vast majority of them will not allow stakes or offer prizes much greater than the category B limits of a few pounds and £500—or, in casinos, a maximum of £2,000. 
 We need huge numbers of people to come to the casinos and play the machines. On more than one occasion, 20,000 has been mentioned as the number of people who regional casinos need to cross their threshold on a weekend—certainly on Fridays and Saturdays. So, there will be huge numbers of people playing the machines and not everybody will walk into the casinos with several hundred pounds in their pocket. Most of them will play with £10, £20, £30 or £40 and then leave and do something else in that complex. That is the experience that has been related to us by American casino owners. 
 Why is there a big question mark about category A machines? Why are they so terrible? I do not think that the Government have justified saying, ''We must keep them in this location, because the consequences of doing otherwise could be traumatic.'' I do not think that there is evidence to justify that view. Countering that argument, again on the theme of comparability, where would that leave the existing casinos—small and large—in this country? They are told that they cannot have category A machines. They can have only eight category B machines, with a maximum payout of £2,000. I think that the maximum stake is £1. I am not sure that they can even have FOBTs; I do not think that they can. So, the option of playing a stake of up to £100 on a FOBT at £15 a throw is not available. 
 The existing casinos, which are membership only, which control their gambling extremely well and which have, to my knowledge, caused no social problems whatever in the past 20 years or more, are being told that they are not able to have category A machines—because? No answer is given.

Don Foster: I apologise for interrupting the hon. Gentleman's flow. He said in passing that he thought that small and large casinos would not be able to have FOBTs. That is not my understanding and I wonder which of us is correct. It is important to get that clear on the record.

Malcolm Moss: I presented my question in a rhetorical manner; I did not know what the answer was. The hon. Gentleman nodded and then looked at his notes and decided that he should not have nodded in agreement. No doubt the Minister will clarify that point. The point that I am making—

Don Foster: Having looked again, I am fairly confident that I am correct in saying that category B2 machines would be allowed, with a maximum of four machines in such casinos. That view is based on page 23 of the helpful explanatory notes.

Malcolm Moss: I am grateful to the hon. Gentleman for clarifying that point. However, the point that I am driving at is about the basis on which the Government have decided that casinos other than the new regional casinos will not have any category A machines.

Richard Page: My hon. Friend is pushing on a most important point. The new regional casinos will have considerable leisure facilities, and my experience and knowledge tell me that some 50 per cent. of their profit will come from activities other than gaming.
 However, if the regeneration moneys are to be put into the various areas, there has to be a carrot: a differential between casinos that have served the country well with very little trouble and the bigger resort and regional casinos. That difference could be category A machines. If such machines were allowed into the other casinos, perhaps fewer regeneration benefits could be creamed off into the various areas. Does my hon. Friend think that a valid point?

Malcolm Moss: It could be, if the proliferation of small and large casinos were allowed. If regional casinos were limited to eight, investors who had hoped to go into regional casinos might look elsewhere and start to invest in new large casinos around the country. We have raised that issue on more than one occasion, and it needs to be addressed. The Government have said that they will look at it, and we wait for their proposals on that.
 If a person has a holistic view of the issue and attempts to control access to category A machines, their argument is weakened if one week they say that they do not mind if there are 50,000 of the machines in 40 regional casinos, but the next week, when the number of potential regional casinos has dropped to eight and there will be only 10,000 potential category A machines, they say that no one else can have them. 
 I tabled an amendment—to clause 163 I think—that would have allowed small and large casinos to have a proportion of category A machines. The amendment was thrown out, but I revisit the issue that it raised, which ought to be considered. If that proportion were small—say, 20 per cent.—that would not amount to a great number of machines in small and large casinos; there would be something like 900-plus in all the casinos currently in the country. 
 The idea that with only six category A machines one would be in a position to pay out huge amounts of money is a nonsense. One cannot pay out huge amounts of money if one has not taken them in. All that the proposals would give the casinos would be the flexibility—also given to the regional casino operators—to set the machines with unlimited stakes and prizes, although limits would obviously be set by economic and financial considerations, because no one would pay out huge amounts if huge amounts of money were not taken.

John Pugh: I want to respond to the comments made by the hon. Member for South-West Hertfordshire. He put one of the arguments for keeping category A machines in regional casinos. Those casinos cannot have it both ways. In one sense, they are sold to us not only as casinos, but as places
 with far more—as entertainment complexes as well. However, they are also sold to us as a particularly lucrative type of casino. One can run one of those arguments, but not both.

Malcolm Moss: People would not seek to invest millions of pounds unless they could see a decent return. Frankly, I think that the jury is out on whether the American experience can be replicated in this country. From the point of view of the incoming investors and the regeneration that we hope will take place, I hope that that is not the case. However, I see little evidence in this country that people are prepared to go in their thousands to play on machines in a casino.

John Pugh: I did not express my point particularly well. I was trying to say that if casinos are to be so inordinately attractive because of their other entertainment advantages, there is not an overwhelming case for their being inordinately attractive because of their gambling machines.

Malcolm Moss: I am sorry that I missed part of the thrust of the hon. Gentleman's question. We have received conflicting evidence. Some operators say that half of their profits will come from gambling and half from other activities. Others have categorically stated that more than 80 per cent. of their profits will come from gambling, which means from category A machines—they will obviously have gaming tables, but the real money will be made from the machines. There is not an absolute model. Some expect to gain more from other activities, but even in those cases, more than 50 per cent. of profits would come from gaming machines.
 It is important that the Government rethink access to category A machines in an even-handed and balanced way. We are not talking about massive proliferation. If there is control of casinos at regional and lower levels, it is only fair that other players should have access to such machines. The Government intend a so-called pilot scheme involving a trial of eight regional casinos, and they will monitor both the effects of the scheme and the gambling experience to highlight any problems. Therefore, the pilot could be extended to all category A machines wherever they are located, and the gambling commission should be in charge of that.

Clive Efford: I am afraid that the hon. Gentleman has left me very confused. In an earlier debate, he was keen to limit the number of regional casinos to eight. He now seems to be advocating the proliferation of major casinos by the back door by allowing existing casinos to have category A machines. What is his definition of a regional casino and of the new casinos that he envisages having category A machines?

Malcolm Moss: I am sorry that the hon. Gentleman is confused; I will try to explain myself as clearly as possible. We have a model of a regional casino with 1,250 category A machines, millions of pounds of investment, and a floor space for gambling of some 1,000 sq m compared with 9,000 sq m for other use,
 including hotels, restaurants and leisure facilities. We tabled an amendment suggesting a trial of four regional casinos, but the Government have decided on eight, and we are reasonably happy with that. However, that still means that there will be 10,000 category A machines. My argument about those machines going to some small and large casinos would mean a maximum of about 900 extra machines. Ten thousand plus 900 is fewer than 11,000.
 Until a few weeks ago, the Government were contemplating more than 40 regional casinos with a total of 50,000 category A machines, and they did not blink at that prospect. The only people who blinked were Labour Back Benchers who gave the Government a hard time on Second Reading, and Opposition Members. Where is the Government's consistency on this issue? There is none because they are all over the place. They have not explained why it is reasonable and proper to give category A machines to new regional casinos but deny them to existing casinos, which have caused no problems over the past 20 or 30 years and rightly feel that they are in an uncompetitive position. 
 I turn now to category D machines, to which my hon. Friend the Member for Hertford and Stortford referred earlier. The Government intend to remove category D machines from a whole swathe of locations, including chip shops and taxi ranks, on the grounds of protecting children. They seem adamant that they will stand by that decision. They are attacking the members of BACTA in adult, but mainly family, gaming centres by saying that restrictions will be placed on category D games so that a prize of a teddy bear will be reduced in value from £8 to £5. That is causing much anger and concern because there does not seem to be any logic to such a change. 
 The BACTA members say that they would prefer to keep the £8 cuddly toy as a prize for presentation purposes. They can then show something substantial to the punter, whereas if the value of the prize were reduced even by £3, it would make a difference in their ability to make a profit. Even at that level, the Government seem a little inconsistent. Why are they taking such action? What is the reason for reducing the value of the prize from £8 to £5? It has no basis in logic. Such a provision was not in the Budd report. I accept that it recommended that category D machines be removed from ancillary places, but I suppose the key to the problem is that, if the machines were in family amusement centres, activities would be policed and there would be management control over who was playing the machines. I go along with the Government in that that gives comfort to those who want to protect the vulnerable and children, in particular. 
 The provision is giving BACTA members a serious headache. On the one hand, they are told that, at the bottom end of what they do, they have to make changes—in the wrong direction, in their view. On the other hand, they are told that they will not be able to move forward and have FOBT machines and others of that ilk. That means that all the time the competition 
 is being enhanced and developed at their expense, as a result of which they will face even greater competition in the future. 
 I return to the argument about the category B machines. Why will they only be in betting shops? Why will not some bingo places and adult gaming centres be allowed to have them? The Government may say that that will lead to proliferation, that controls must be exercised in one way or another, and that the gambling commission will be able to review matters later. However, huge swathes of the industry are now left with the uncertainty of wondering whether their businesses will survive. For whatever reason, the Government have decided to take certain measures without understanding the fundamental impact on the businesses concerned.

Mark Prisk: I am sorry to interrupt the flow of my hon. Friend's argument; he is about to touch on an essential element. I want to return to my worry that, as is often the case with regulations, the people who will be most affected by the provision will be the small, family enterprises. Will my hon. Friend comment on that?

Malcolm Moss: I am grateful to my hon. Friend for emphasising that point. Perhaps I did not cover it in enough depth, but a huge number of businesses, especially BACTA members who run amusement arcades, many of which are fundamentally important to the leisure experience in many seaside towns, feel under threat. They are mainly small businesses. Their problem is that, if they do not invest, their businesses will deteriorate because their shop fronts and arcade fronts will being to look seedy and decrepit, which is the last thing that they want—[Interruption.]

Roger Gale: Order. If the hon. Member for Blackpool, North and Fleetwood (Mrs. Humble) wishes to open her post, would she read it in the Corridor or, at least, less audibly?

Malcolm Moss: I am grateful to you, Mr. Gale. I thought that the hon. Lady was opening a big sweetie and I would not have minded one for later.

Joan Humble: It is a Fisherman's Friend.

Malcolm Moss: That joke fell flat last time I made it. Not many people realise that Fleetwood is famous for the Fisherman's Friend lozenge. Have you got some?

Roger Gale: Order. I have not.

Malcolm Moss: Returning to the clause, many BACTA members are small businesses and they feel that they are being attacked from all sides. At the bottom end, on the category D machines, they are being attacked on the value of the prizes that they can offer, and in their adult centres they are not being allowed to expand into category B machines. They feel that the anti-competitive nature of much of the Bill is seriously deleterious to their interests and future, and many are worried about the uncertainty.
 We had a debate on an earlier clause about the Secretary of State's powers to alter provisions. The Minister would argue that the gambling commission will advise the Secretary of State, but, again, there is a question mark over the industry. Some people are saying that, because of the Bill, they cannot sell their businesses because no one can afford to buy them based on the value that they had several months ago. There is uncertainty about putting a proper value on a business, and that leads to uncertainty in planning for the future. If the future for those gaming centres is as bleak as people say, not only will they not sell them, but many businesses will be devalued, a lifetime's work will go down the drain and many of our seaside towns will be worse off because those businesses no longer exist. There are inconsistencies throughout the Bill. 
 The Bill is about location and accessibility to gambling, gaming and betting, but this clause is about the facility that is available in each location. It is critical not just to look at where the locations are and how many there are, but to get the categorisation of machines right.

Richard Page: Does my hon. Friend feel that when the Minister replies to his valid and wise comments, he should address the time scale for the measures? Any business, if it knew that there was to be a review and an outcome to be reached, would be prepared to handle that and to plan. The scrutiny Committee said that a number of category A machines should be allowed into casinos that were in operation before 7 August 2003; it then said that any casinos starting after that date should be considered after a period of showing that they are capable of running a proper operation. The Government responded by saying that their
''policy is to limit accessibility of Category A machines by initially allowing them only in regional casinos.'' 
They then said: 
 ''Clearly there are risks and the Government believes it is right to proceed cautiously with effective and rigorous monitoring of their impact.'' 
I go along with all that, but they then said that 
''the Government is minded to await the results of at least two prevalence studies, after the implementation of the new regime, before considering significant alteration to the gaming machine entitlements of all types of casinos.'' 
That is as long as a piece of string. Will it be one year, two years, 10 years or 20 years? We have no idea at all. Does my hon. Friend feel that the Minister should try to give a time scale to provide comfort to casino operators so that they know how to plan for the future?

Malcolm Moss: My hon. Friend moves the argument on another stage. At this juncture, I was not attempting to be too specific or prescriptive. The key decision that the Government should be taking—they may well have to take it in the other place—is to be more even-handed, fair and balanced in their approach to who gets what machine. My hon. Friend makes a valid point, which was addressed to the Minister. The timing
 of the introduction of many of these things is as important as the decision to allow them in the first place.
 I wind up my remarks on category D with the views of BACTA members. All in all, the Government could not have got it more wrong, because the Bill pleased no one in the industry. Many Government Bills do not find favour with sections of the business community, but to upset everyone must be the accolade of all time. I rest my case.

Don Foster: I hope I shall be briefer than the hon. Member for North-East Cambridgeshire, who covered many important points in a lengthy contribution, and I do not criticise him for that. I want to pick up on a couple of the points that he raised and to ask the Minister one or two questions.
 The hon. Gentleman rightly raised several issues in respect of category A machines, which, he pointed out, allow a wide variety of things to happen. Some of those machines will be set in such a way that the maximum stake, and the maximum prize, is unlimited. We understand from the Minister that experience worldwide suggests that operators are likely to set about 10 per cent. of their machines to take an unlimited stake and give an unlimited prize, although he was not prepared to cap the proportion, as some of us hoped that he would. 
 In paragraph 2.18 of the regulatory impact assessment, the Government make it clear that they are concerned about the potential harm of the proliferation of high-prize, high-stake machines and wish to keep the matter under review. As we understand the current circumstances, when the Minister eventually proposes his amendments to clause 7, the proliferation of category A machines will be limited by restricting the number of regional casinos—the only casinos that can have category A machines—to eight. The Minister said that that would allow them the opportunity to carry out research into the effects of the introduction of category A machines, especially in relation to their effect on problem gambling. However, the hon. Member for North-East Cambridgeshire rightly pointed out that that will lead to a furtherance of the unlimited playing field between the new regional casinos and the existing 134 UK casinos. 
 The Minister could have said that, if there is to be a trial of the effects of category A machines, especially in relation to problem gambling, a better set of circumstances in which a trial could take place would be having a limited number of category A machines in a wider range of settings—in other words, allowing a small number of category A machines in small and large casinos, which, as the Minister said, will be limited in some way.

Richard Page: Will the hon. Gentleman give way?

Don Foster: In a moment. Surely, by so doing, it would give a much better opportunity to provide a more level playing field and better circumstances in which the research could take place. I remind the Minister and the hon. Member for North-East Cambridgeshire that I did a calculation last week
 based on the hon. Gentleman's figures that showed that if, for example, small and large casinos had a limit of 20 per cent. of their machines as category A machines, the existing 134 casinos would have a grand total of only 824 category A machines, which would be far less than the 1,250 category A machines that any one of the new regional casinos could have. I do not believe that that would add significantly to the number of category A machines in circulation, and it would enable us to have a more level playing field and a better set of circumstances for trials.
 We had a discussion about certain aspects of category B machines, particularly the FOBT machines, and I shall wait for the Minister's response to check what the circumstances might be in that regard. I want to conclude by making a few points in relation to category D machines. 
Mr. Page rose—

Don Foster: I do apologise. I promised to give way to the hon. Gentleman earlier. It was discourteous of me not to do so.

Richard Page: We all have senior moments; I am happy with that. I apologise to the hon. Gentleman for not being present for his opening remarks. I came in when he was talking about trials in certain large and small casinos. That sounds marvellous in theory, but would that not create an imbalance with other large casinos that were not part of the trial? Would the clientele not be tempted to go to the casinos that had the category A machines as opposed to those that did not? I am with the hon. Gentleman in his spirit of experimentation but I am not sure whether that is fair to the whole industry.

Don Foster: I do not wish to be unkind to the hon. Gentleman, but at the point of my speech when he entered he did not quite engage himself. I did not suggest that only some of the small and large casinos would have the opportunity for 20 per cent. of their machines to be category A. I suggested that all of them should have that opportunity. Whether they choose to take it up is a matter for them. If all took up the option—if my calculations are correct—there would be a total of 824 category A machines.
 To move on to the subject of category D machines, I have a great deal of sympathy with the remarks of the hon. Member for North-East Cambridgeshire. I am not convinced by any of the arguments that I have heard advanced by the Government—although detail in those arguments has been scarce—to justify the reduction of, for example, an £8 cuddly teddy bear to a £5 one. There are no benefits for anyone in doing that. There is no research evidence that suggests that doing so would reduce the proliferation of problem gambling among young people and children. I am sure that the Minister, having heard our concerns, will have done a bit more homework by now and will have some information for us. 
 The hon. Member for North-East Cambridgeshire raised an issue that we have debated at length, but it is important to put it on record. There is a sword of Damocles, as I describe it, existing in clause 157 whereby the Secretary of State will have reserve powers to make it illegal for parents to enable their children to use category D machines. Apparently, it is a backstop power that might be necessary in the event that research demonstrates what we know is not the case at the moment, based on the rather limited evidence to date—the significant problem that the Minister suggests might arise as a result of later research does not exist. 
 That sword of Damocles is of great concern to those people who own and run family entertainment centres. I find it totally bizarre that the Secretary of State will have backstop powers in relation to category D machines in those circumstances, but will not adopt similar reserve powers in relation to category A machines. I find that difficult. In the event that the Government find that there is no research evidence to suggest that category A machines lead to increases in problem gambling, will the Minister explain the arrangements whereby the Government will consider making it possible for small and large casinos to have them? 
 Therefore, there is concern about the sword of Damocles and about the changes in prizes. There are also concerns about when the Government are likely to have a change of heart on prizes, categories, speed of machine operation and so on. An issue that we have touched on is the absence in the Bill, on the surface at least, of a triennial review, something that has proven helpful in the past.

Mark Prisk: The hon. Gentleman is making some pertinent points. Does he share the view that, while the continuing uncertainty about the nature and scope of the regulations is frustrating for us as a Committee, the uncertainty is more acute for the businesses that will be affected? Does he share my concern that that is often overlooked by Government, both at a ministerial level and in the civil service?

Don Foster: The hon. Gentleman is 100 per cent. right. Those concerns have been expressed to me by a large number of people, both those I have spoken to face-to-face and those who have contacted me by other means. He will, no doubt, be aware that there are 44,500 category D machines in 30,000 unlicensed premises, all of which look likely to lose part of their source of income. However, there is uncertainty about whether they will do so.
 To pick up that point, as I was going to come on to it, it worries me enormously that the Government are, based on no convincing evidence that I have come across, proposing to take away from fish and chip shops, taxi cab offices, cafes and so on the opportunity to have category D machines. That will have a significant impact on some businesses. 
 It was suggested earlier that up to 30 per cent. of profits might be lost by some organisations. Some research that I did on fish and chip shops suggests that that figure is not totally out of order. My own figures 
 suggest that up to 25 per cent. of profits might be lost; that is the same order of magnitude. That in turn is backed up by the Henley Centre report, which the Government generously make reference to in the explanatory notes, which suggests that up to 600 businesses may close as a result. The hon. Gentleman talks about uncertainty and the impact that it has on business. Even the Government, in their explanatory notes, make clear that there is cause for real concern. 
 That concern is about what is proposed in the Bill. It does not include the concern about the other powers that the Secretary of State will have, not least those in clause 157, which include the reserve powers. Therefore, there are many concerns about category D machines, many of which have been picked up before. 
 Perhaps the most important thing is to have some stronger suggestion from the Minister about what the hon. Member for South-West Hertfordshire called the time scale for a review of the decisions that are being taken. I remind the Minister of the exchange that he and I had when we were talking about the triennial review. The Minister will recall that I proposed an amendment to reinstate the triennial review, which mirrored an amendment that the hon. Gentleman moved during that deliberation. The Minister said: 
 ''However, we do not believe that the triennial review needs to be enshrined in legislation. The review of stakes and prices under the 1968 legislation has operated effectively and for many years as a matter of custom and practice. I expect that to continue.''
 I intervened to say: 
 ''When the Minister says that he expects the current arrangements for the triennial review to continue, would he welcome it if they did so?'' 
I was grateful in part for the Minister's response: 
 ''I suppose that I would welcome that''.—[Official Report, Standing Committee B, 2 December 2004; c. 382.] 
That is not quite as convincing an answer as I would like and it is certainly not as convincing as the people who work in the industry would like. If the Minister can do nothing else, he could make it absolutely clear that the Government wish the new gambling commission to instigate a continuation of the triennial review. At least that will give part of the answer to the concerns of the hon. Member for South-West Hertfordshire about having a clear timetable.

Roger Gale: Order. If the Minister seeks to do that, he will have to persuade the Chair that it is in order because I cannot find any reference to it in the clause.

Don Foster: I had sat down, Mr. Gale, but lest I am somehow tempting the Minister to speak words that might cause you to be upset with him, I suggest that the clause sets out the details of the various categories of gaming and gambling machines that are to be allowed in this country and that the triennial review provides the opportunity to make changes to that. The triennial review or some sort of review process is a crucial part of the clause. If within a short time the Government acknowledge, based on research, that they have got things wrong, we need assurances that they have the powers to put that right. More important, we need assurances that they have the powers to have research carried out to show that they have got things wrong.

Roger Gale: Happily, I suspect that Mr. Pike will have to make that decision.

Mark Prisk: This is an important issue. It appears narrow, but it is not in so many ways. The excellent exposition from my hon. Friend the Member for North-East Cambridgeshire highlighted a number of questions. I want to concentrate on two aspects. The first is the purpose of the regulations in the clause, particularly with regard to the scope and nature of category A and B machines.
 I turn to the regulatory impact assessment, with which the Government have provided us, to understand their objectives for the regulation of gambling. They tell us—I will quote briefly from the RIA—that their objectives for regulating gambling are clear. Their first objective is to 
''prevent gambling being a source of crime and disorder''. 
In what possible way do the regulations fit that? I do not think that they do. The second purpose is to 
''ensure that gambling is conducted in a fair and open way''. 
As both speakers have told us, it is quite clear that there is an inherent unfairness that lies at the heart of the way in which the regulations have been presented to us. We then turn, in slight desperation, to the third Government purpose, which is to 
''protect children and other vulnerable persons from being harmed or exploited by gambling''. 
In what possible way are the regulations appropriate, or indeed relevant, to that and how are they, by distinguishing between existing and new forms of casinos and establishments, in any way fulfilling that purpose? 
 I am at a loss to understand exactly how these regulations and the clause fit the Government's overarching objectives in terms of regulation. I hope that, when the Minister responds, he will tell us which of those three objectives the regulations are meant to fulfil. 
 I now come to the pivotal question, which I have alluded to in a number of interventions on my colleagues and the hon. Member for Bath (Mr. Foster). This is an important issue. The key word that was used several times by hon. Members is ''uncertainty''. It is easy for us to look at these issues as simply words on a piece of paper, but they are not. They will directly affect the livelihoods of millions of people. I am particularly concerned about owner-managers—people for whom this is not simply a job, but probably their livelihood and in many cases their pension. It is not just about whether they have employment. It is about the future of their livelihood and family. Therefore, I take the issue seriously. 
 I raise that point because it appears, from the deliberations this morning and from talking to those involved with enterprises in my constituency, including a number of fish and chip shops and a number of other small enterprises, that those people really do not know where they stand and what future there is for their livelihood.

Don Foster: Does the hon. Gentleman share my considerable surprise that, responding to a parliamentary question of mine on 7 September, the Minister told me that at that time neither he nor his Department had had any consultation with the bodies that represent the owners of premises such as fish and chip shops and cab offices? Is the hon. Gentleman not surprised that, considering the huge impact the legislation might have on such organisations, there has been no consultation?

Mark Prisk: If I did not know this Government better, I would be surprised, but, as I am one of the officers of the all-party group on small business, which, I am happy to say, is the largest all-party group, dealing with a matter of concern to all Members, I know that all too often consultations ignore important groups and sectors, particularly the smallest and most vulnerable of our businesses.
 This legislation has had a large gestation period. The Minister is proud of the range and scope of the consultation, although as the hon. Member for Bath has highlighted, there have been significant flaws and absences from it. I detect a peculiar position. The Committee is considering amendments based on negotiations taking place simultaneously to our deliberations. The problem with that is twofold. First, it limits the House's ability to scrutinise effectively and thoroughly, because matters are changing almost as we discuss them. That has been illustrated by the six-page new schedule, which landed on us with less than 24 hours of parliamentary time in which to consider it. Secondly, it highlights the concerns among many businesses that policies are being dreamt up by the Government as they go along. 
 I am concerned because we are dealing with real people. We have heard the Government's own estimate that 600 businesses are potentially at risk. I suspect that there will be more. I fully accept that I do not have any evidence for that, but in talks with many of my local enterprises, it has become clear that they genuinely do not see their way out of the process. 
 The way in which this legislation has been brought about has been poor. We have seen it in other instances. I will not detain the Committee by 
 highlighting them, as you, Mr. Gale, will quite rightly say to me that it would be inappropriate to do so. However, the way in which the Government are determined to muddle through, rather than establish the facts, create clear policies and introduce them with the full support of those affected, is not unfamiliar to us.

Clive Efford: Will the hon. Gentleman explain how a proliferation of gaming machines in unregulated establishments on high streets throughout the country is consistent with his concerns about large numbers of category A machines?

Mark Prisk: The hon. Gentleman will realise that that was not what I was saying. I was talking of my concern about the impact on small businesses. The concept of proliferation is rather rich coming from the Government Benches. There has been no consistency from the Government.
 Without wishing to stretch the patience of the Committee any further, I will conclude by saying that the remarks made by my hon. Friend the Member for South-West Hertfordshire were right.

Ann McKechin: Will the hon. Gentleman give way?

Mark Prisk: Not at the moment. We need to see a time scale established. It is important. If the hon. Lady wishes to contribute, she is welcome to do so after I have concluded, but I do not wish to stretch your patience any further, Mr. Gale. The Minister should in his reply ensure that a time scale is set out, so that those owner-manager businesses in my constituency and elsewhere are able to plan their businesses and have a sensible future.

Ann McKechin: I have listened very carefully to the Opposition, and their argument that category A machines should be tested—
 It being twenty-five minutes past Eleven o'clock, The chairman adjourned the Committee without Question put, pursuant to the Standing Order. 
Adjourned till this day at half-past Two o'clock.